Future of The Sydney Subdivision
The eastern section of the railway's main line from Port Hawkesbury to Sydney, the Sydney Subdivision, has undergone a significant decline in traffic since CN sold the entire route to RailTex in 1993.
The first decline occurred in 1997, when CN stopped routing Terra Transport container traffic bound for Newfoundland via the Marine Atlantic ferry service at North Sydney. From 1978-1997, Terra Transport containers were hauled by rail to the North Sydney railway yard where they would be transferred onto truck chassis and placed on board a ferry destined for Newfoundland. Until the abandonment of CN's rail services in Newfoundland in 1988, they would be transferred onto CN's narrow gauge trains at the ferry terminal in Newfoundland and delivered to destinations across that province. Following railway abandonment in 1988, the containers remained on the truck chassis for delivery by truck. A combination of changes to Marine Atlantic's ferry service, coupled with a desire by CN Rail to increase traffic at the Port of Halifax, saw these containers re-routed to Halifax where they were hauled to Newfoundland by the shipping company OceanEx.
The second decline occurred in late 2001 when a large steel mill and several coal mines were closed by Sydney Steel Corporation and Cape Breton Development Corporation respectively in the Sydney area. This change resulted in the loss of thousands of car loads per year and threatened the financial viability of the line. The railway retains several small industrial customers and wholesalers that create a combined 1,500 car loads per year east of Port Hawkesbury.
At the same time as this major loss in traffic occurred on the Sydney Subdivision, Via Rail Canada was experimenting with operating a once-weekly return trip tourist train from Halifax to Sydney called the Bras d'Or. The financial uncertainty of the Sydney Subdvision saw CBNS apply in 2004 to the Nova Scotia Utility and Review Board for permission to abandon the section east of St. Peters Junction (several miles east of Port Hawkesbury) in 2005. This resulted in Via's decision to permanently cancel the Bras d'Or at the end of 2004 operating season.
The section of the line east of St. Peters Junction (near Point Tupper, Nova Scotia) to Sydney has the highest maintenance requirements per mile on the entire railway as it includes the longest railway bridge in the province, the Grand Narrows Bridge, as well as two large trestles. CBNS has revealed that at least 10,000 car loads per year are required to generate enough revenue to maintain the Sydney Subdivision.
In September 2005, the Government of Nova Scotia announced that it had reached an agreement with the CBNS whereby the government would provide the railway with a $10 million subsidy to keep the rail line from Port Hawkesbury to Sydney open for the next five years, expiring in March 2010. In return, CBNS withdrew its application to the NSUARB for permission to abandon this section of its main line. A one year extension of this subsidy was approved by the government in September 2010 that was retroactive to April 2010. On 3 October 2011, it was announced that the government had agreed to continue the subsidy for three more years, allowing RailAmerica access to $2 million over the timespan of the deal.
Freight service for this section of the main line is currently provided by a small twice-weekly freight train that operates as a round trip between Sydney and Port Hawkesbury. Freight service west of Port Hawkesbury to the CN interchange at Truro is operated six times per week.
In 2008, the holding company RailAmerica which is the corporate owner of CBNS encountered significant financial pressure from its corporate owner Fortress Investments. This saw CBNS dramatically increase the rates it charged to individuals and companies accessing railway property (e.g. driveways, storage, etc.). The resulting backlash saw the provincial government under Premier Rodney MacDonald and his successor Darrell Dexter attempt to negotiate a means to regulate such rates.
Read more about this topic: Cape Breton And Central Nova Scotia Railway
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